The Impacts of BEPS on Intellectual Property Tax Planning Case Study of “Double Irish” and “Dutch Sandwich”

Abstract

                   The Double Irish and Dutch Sandwich strategies are classified as international tax avoidance schemes that are usually exploited by high-tech multinational enterprises (MNEs), like Apple and Microsoft, for generally shifting huge profits through the layer of intellectual property licenses to low-tax or no-tax jurisdictions via Ireland. However, these strategies have been considered as very aggressive tax planning and have been put under global spotlight. Accordingly, the Base Erosion and Profit Shifting (BEPS) project—launched by the Organization for Economic Co-operation and Development (OECD)—purposes to grapple with the problems of BEPS by creating a BEPS Action Plan as internationally agreed standards. Under pressure from OECD and other countries, Ireland has already modified its tax laws and policies to comply with key BEPS recommendations. After the changes, it is doubted whether the Double Irish and Dutch Sandwich strategies will come to an end. Thus, this paper aims to analyze the effect on the Double Irish and Dutch Sandwich structures in the post-BEPS era.